KPMG has appointed Michael Ebeid as its new chair, despite previously claiming that whistleblower leak allegations were 'completely false' and describing a senator's actions in revealing the scandal as 'very inappropriate and unfair'. Ebeid took over on Thursday after former chair Martin Sheppard resigned amid a parliamentary inquiry into the firm's ethical failings.
Ebeid's Emails Revealed
Following the appointment, the parliamentary joint committee on corporations and financial services released emails showing that on 25 March, Ebeid responded to a message from deputy chair Carmel Mortell. In the email, Ebeid wrote: 'I assume Senator O'Neil [sic] made no attempt to contact KPMG before speaking … which in itself would be very inappropriate and unfair of her.' He also accused Senator Deborah O'Neill of misrepresenting events and stated, 'many of the statements she makes are completely false.'
Ebeid later apologised on Thursday, saying he was not aware of 'the full range of facts' at the time. 'I recognise the gravity of the whistleblower's allegations and the shortcomings in the firm's approach at the time. From what I now know … I would not have written that email and am sorry for sending it,' he said.
Senator Criticises Appointment
Greens senator Barbara Pocock, a committee member, criticised the appointment, stating it 'risks entrenching the very culture and leadership that need to change. This is not the fresh start for KPMG that it attempts to be. Mr Ebeid is a part of the culture and leadership team where things have gone seriously wrong in KPMG.'
Ebeid was one of three independent board members overseeing KPMG's investigation into whistleblower allegations of leaks and other failings in the audit division. The committee's chair, Senator Deborah O'Neill, made the allegations public in a speech on 24 March.
KPMG's Admission and Fallout
KPMG has admitted its own investigations were not rigorous enough after failing to find evidence of the allegations. Following O'Neill's speech, the firm acknowledged at least three staff had leaked confidential Lendlease and Optus information to colleagues applying for lucrative audit contracts at Westpac, Dexus and Telstra. Sheppard initially refused to share investigation documents with the committee, claiming legal privilege, but relented on 19 June and resigned on 23 June.
The committee said it published the emails in response to Ebeid's promotion, as he would have an 'important role' in addressing integrity issues and rebuilding trust. It also rebuffed Ebeid's suggestion that he knew O'Neill and could meet her, stating: 'no member of the committee, including [O'Neill], knows Mr Ebeid nor have they met with him since the whistleblower allegations were raised.'
Future Reforms
Earlier on Thursday, KPMG's statement announcing Ebeid's appointment said he would accelerate the appointment of a new chief executive and suggested more top staff could be replaced. KPMG's former chief executive, head of audit and chief operating officer have all stepped down. Ebeid said, 'The incoming CEO will have a clear mandate to refresh the executive team where required.'
The federal government on Wednesday said it would consider splitting up the big four consulting and audit firms and capping partner numbers in response to the scandal, avoiding such reforms after the PwC tax leaks in 2023.
